Climate summit: Coal will continue to be the mainstay of India's energy basket, says government official

India's ambitious renewable energy push, which includes a seven-fold increase in generation capacity, is unlikely to help bridge the country's huge development deficit. Its development needs are real. It is not just the 400 million people without access to electricity and hundreds of million more who are underserved compared to global averages of electricity consumption, who present a challenge for the Indian government.

The government has said that it intends to ensure that all households have electricity by 2022. This electricity for all drive apart, there will be a surge in demand for energy as India industrialises, builds infrastructure, and urbanises. Access to energy is central to this enterprise of achieving sustained economic growth and eradicating poverty.

Foreclosing the option of using coal doesn't look like much of an option for India. "Coal will continue to be the mainstay of India's energy basket. But we are prepared to look at options," says Environment Secretary Ashok Lavasa.

India's top environment official is not obfuscating the issue when he says that India is open to options. New Delhi has proposed an ambitious ramp up of renewable energy capacity—from about 40GW to 175 GW in eight years. An ambition that translates in the climate plans submitted to the UN ahead of the Paris meet to ensuring that by 2030, 40% of the country’s installed power generation capacity would be non-fossil fuels. New Delhi is working to put together an alliance of some 120-odd countries with high solar energy potential to make the large-scale use of solar energy economically viable.

These efforts are expected to reduce the share of coal in generation from its current level of 61% to 57% in 2031, while solar which at present accounts for 1% of the total will increase to 10%.

Policy makers and experts show wide divergences in their projections on the surge in energy demand. They argue that is difficult to determine the range of this surge with any level of precision as India’s needs are unpredictable. The government is looking at augmenting manufacturing on a large scale through the Make in India plank, increased urbanization and a push for setting up as many as 100 smart cities, and most of the country’s infrastructure is yet to be built—all this makes India’s energy requirements big but also unpredictable. India’s current generation capacity is 230GW, this is projected to increase to 820-870GW by 2030.

"The big question for an economy like ours is: where will the electricity come from?" asks environment secretary Lavasa.

Drawing on the INDCs, senior fellow at the Delhi-based think tank Centre for Policy Research, Navroz Dubash says that India could add as much renewable energy as the entire size of its grid by 2030. "But even this huge renewable energy addition would likely not substitute for a great deal more coal, because our overall needs are going to grow even more. This said, there are a lot of uncertainties about just how much energy we need in the future."

The uncertainty of India's energy needs makes it difficult to quantify how much more coal would need to be used. Dubash says, "much depends on whether we manage to radically restructure our economy to be more energy efficiency, which would be good from an energy security and air pollution point of view, and also bring about reduced greenhouse gas emissions." Experts agree that all efforts notwithstanding coal will remain the mainstay of the energy basket.

Senior officials dealing with climate issues argue that across the world, for most part fossil fuels are the mainstay of energy systems. "All established economies grew on fossil fuel. Now with climate change, we are attempting to do things differently. But in making choices, economies like India cannot lose sight of the overwhelming development deficit its people face," Lavasa explained.

But it is not just India. Benjamin Sporton, Chief Executive, World Coal Association points to the countries like the United States and Germany, where coal will continue to be a significant energy source. “According to the US Environment Protection Agency, the share of coal in electricity in the US will be at 27% after 15 years of implementing the Clean Power Plan. Today, share of coal is between 33% and 35%. Coal is not going away.”

Indian negotiators stress that they are not seeking the right to pollute, which is how continuing with the use of coal is being increasingly viewed. India's objection emanates out the real dilemma of balancing the needs of development and ensuring rapid economic growth with addressing climate change and ensuring ecological sustainability. They argue that India is cognisant of the need to reduce emissions, and the effort to increase the share and deployment of clean energy makes that clear.

New Delhi stresses that its dependence on coal for power should not be seen as its unwillingness to take climate-friendly measures and help reduce carbon dioxide pollution. "It isn't that India is not aware of the emission pitfalls of using coal. That is why we are constantly stressing on the use of coal without causing high emissions,” Lavasa explained. "What we are saying that we will continue to use coal, but will do so in a manner that minimises the ill effects, through use of better technology and stringent regulation."

New Delhi has stressed on the central role that better technology will play in ensuring that its coal-based thermal plants have considerably lower emissions. India has already mandated that all new coal plants must use super critical and ultra-super critical technology.

Officials say that it is not just relying on technology to reduce the level of emissions; stricter regulations are another instrument it is using. The government is finalising stricter emission norms for all power plants. "Draft emission standards for all coal power plants were made public for feedback. We are now in the process of finalising the norms," an official involved in this exercise said. Additionally, the government has also tightened the existing norms for the use of fly ash. Indian domestic coal has high ash content, which adds to the levels of emission, the government is in the process of making coal washing at pit heads mandatory.

The government is also finalizing a policy that will allow companies to divert coal supply to efficient power plants from inefficient plants. Experts say that the efficiency-based swap proposal is premised on the need to use resources in a sustainable manner. “This is a good move. It will force developers to retrofit the less efficient plants or shut them down. As such it will yield economic benefits and positive environmental impacts.”

Officials also point to existing policies of renovation and modernization of thermal power plants by which companies have to upgrade existing plants to make them more efficient. There is the PAT (Perform, Achieve & Trade) scheme, which is part of the efficiency measures, is geared to making thermal power plants more efficient

Many feel that the shift from fossil fuel to non-fossil fuel must be led by countries with stable energy requirements or countries with life line consumption levels of 2,000 kWh. In the past, Environment Minister Prakash Javadekar has referred to what he describes as the 'double speak of the developed countries'. Referring to an interaction at climate change meeting, Javadekar said, "I asked why these countries don’t stop exporting coal. They want to export coal and earn profit and simultaneously lecture people about not consuming coal." But the minister too acknowledges that while India’s coal consumption will increase, it must adopt cleaner practices, focus on energy efficiency and increase the size of the renewable energy portfolio.

But more India's top environment official explains that coal is central to the energy basket given the competing demand on resources, and the scale of the demand. "The 175 GW of solar and wind energy target will require an investment of nearly $200 billion in investments. Back of the envelope calculations put the cost of 200GW of coal-fired capacity at $1.85 billion Rs 6 crore per MW,” an official explained, adding that it isn't just costs, "Also consider that the plant load factor for coal-based units is about 70%, whereas it is 20% to 25% for renewables. So basically, the $100 billion in investment in coal will yield more energy than renewable sources."

Senior officials say that in meetings with key players like the United States, Germany, and France, New Delhi has made it clear that it cannot abandon the use of coal, not at this stage of development at any rate. And since the idea is to reduce the emissions from coal, without sacrificing growth, the effort should be to ensure adoption of clean coal technologies. "But if saying no to coal becomes part of the agreement, then all it will mean is that there will be no research in clean coal technologies. It would mean countries like India will have to choose between emissions and growth. There is no proactive move by the industrialised countries that shows an understanding of India’s position," a senior negotiator said.